The Texas Homestead Exemption: What Is It? And How to Benefit From It
- Angela Slawinski
- Jan 2, 2023
- 4 min read
• Have you recently purchased a home in Texas? If so, you may be eligible for a homestead exemption.
• The homestead exemption may provide significant savings on your property taxes every year, so it's good to understand all of the details.
• Here I will share what homestead exemptions are and how to apply.
NOTE: Prior to January 1, 2022, applications for the homestead exemption were not allowed to be submitted until the next calendar year after a purchase. As of 2022, home owners may now submit an application immediately after completing the purchase of their property, provided an exemption was not already submitted for that current tax year. This is a recent change so many new home owners may not have filed the exemption just after a purchase in 2022. Now is the time to file if you have not!
What is a homestead exemption in Texas?
A homestead exemption in Texas is an exemption, or a “tax break” that may be applied to your primary residence. It can lower your property taxes by exempting a portion of the value of your home from being taxed.
The amount of the tax exemption may vary depending on the county in which you live, but could be up to 20% of the appraised value of your home. In addition to the homestead exemption, Texas also offers other property tax exemptions for homeowners to include a disabled veteran's exemption and an over-65 exemption.
If you think you might qualify for a homestead exemption, be sure to contact your local tax office for more information.
How do homeowners qualify for a homestead exemption in Texas?
To qualify for a homestead exemption in Texas, property owners must own and occupy their property as their primary, or principal residence on January 1st of the tax year.
The property size must be less than 10 acres if it is located within a city limit, or less than 200 acres if it is in the county, or located outside of a city limit. To apply for the exemption, homeowners must submit a completed application to their county appraisal district.
Once the exemption application has been granted, it will remain in effect as long as the homeowner continues to own and occupy the property as their main or primary residence.
What documents do you need to provide the county appraisal district office?
When you purchase a home, the county appraisal district office will require certain documents in order to process your application.
First, you will need to complete and submit an application form. To find this form, contact the county appraisal district office or use the internet to locate their website to see if the form may be available online.
Next, you will need to provide a copy of your driver's license or other valid photo ID such as a passport. This is necessary for identification purposes. Also, you will be required to show proof of residency by providing documentation, such as a utility bill.
Once the application has been submitted, the county appraisal district office will be able to process your application and will issue a property tax certificate to the owner of the home that filed for the exemption.
How much can you save with a homestead exemption?
When homeowners refer to the residential homestead exemption, they are typically referring to a standard homestead exemption. Under Section 11.13(b) of Texas’ tax code, public school districts are required to offer a $40,000 exemption on primary residences located within their districts.
For example, if the assessed value of your home is determined to be $600,000 by your local tax assessor, then the most common exemption under Section 11.13(b) might be able to reduce your assessed value by $40,000 to $560,000. Therefore, your property taxes would be calculated based on a value of $560,000 instead of $600,000.
There are other exemptions under Texas’ tax code, a few of the other most common are:
Section 11.13(a) requires a homestead exemption of $3,000 to be offered in those counties that collect flood-control or "farm-to-market" taxes.
Section 11.13(c) requires school districts to provide an additional $10,000 residence homestead exemption for persons age 65 or older or disabled, or to their surviving spouses if age 55 or older.
Section 11.13(n) gives taxing units the option to offer a separate homestead exemption of up to 20% of the appraised property value — but not less than $5,000.
The Texas Comptroller provides a list of all property exemptions online:
What happens if you move out but don’t sell your home?
The homestead exemption is only allowed for homeowners who actually live and reside in their homes as their primary residence. If you move out of your home, even for a temporary time, you will no longer be eligible for the homestead exemption.
If you move out of your home for more than six months, you would need to reapply for the exemption when you move back in. However, if you permanently move to another residence, you will no longer be eligible for the homestead exemption at the prior home.
How often do you have to renew your homestead exemption in Texas?
Once a homestead exemption is granted, it will remain in place as long as you continue to live in the home and use it as your main, or primary residence.
Generally, it is an excellent idea to periodically review homestead exemption rules every few years to make sure that you are receiving the max potential benefit you are eligible for.
If you need further guidance, please reach out to me and I'll be happy to assist you!
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